Small business is known as the engine of the economy, and if that analogy is true, it could be said that the engine has not been maintained lately.
But now, officials in the state and federal government are seeking to publicize both recent and longstanding programs and tax breaks for small business.
“Over the past few months my office has received dozens of inquiries,” said Congressman Maurice Hinchey. He said businesses are seeking information on effects of the new health care law and also on the package of small business tax cuts recently approved by Congress.
Hinchey was hosting the Hudson Valley Region Small Business Forum at the State University of New York at New Paltz on Oct. 12, an event designed to educate small business owners of federal and state tax credits and new lending initiatives designed to spur new investment and job creation under the Small Business Jobs and Credit Act signed by President Obama in September.
The act establishes a Small Business Lending Fund to extend $300 billion in loans to small businesses. It also provides $12 billion in small business tax cuts, as part of a package of eight bills to spur investment, growth, new starts and hiring.
Among the new provisions available to business owners under the Hire Act is a payroll tax holiday for businesses that hire unemployed workers and an income tax credit of $1,000 for businesses that retain these employees.
There are $40 billion in tax credits available to help businesses that offer health insurance to their employees, a program designed to subsidize a portion of the premium payments. ?New laws allow businesses to use more favorable formulas when figuring out their tax burden, doubling the tax write-off from capital investment, for example, and upping from to two years to five years of losses to be considered when calculating taxes paid on business profits.
State officials also stressed that now is a good time for small business to make investments.
John King, vice president of the New York Business Development Corp., touted the SBA-504 program, which he called “the preferred real estate program,” which allows a small business to put down as little as 10 percent on commercial real estate instead of 25 percent, and with a loan guaranteed over 20 years to remain at 5.08 percent.
The Small Business Act is “the most important piece of legislation for small business in over a decade,” he said, and enhances access to capital, business counseling and contracting. There is some $14 billion in funding available under the SBA Job Loan Act, and the size of loans have been increased from a maximum of $2 million to a maximum of $5 million, while the range of microloans have been upped to a maximum $50,000.
King noted in his talk that Fed Ex, Google and Ben and Jerry”™s ice cream all started as small business recipients of SBA loans, and cited a restaurant, car dealer and medical center in Ulster County among those that recently received such loans. “So there are some very good things expanding and growing and getting better in the Hudson Valley,” he said.
Hinchey made the same point, citing the $30 million in federal funding he steered toward the solar energy consortium since 2007, which has created at least 600 jobs in a solar energy business cluster centered at Tech City.
He predicted that after the elections, when political gamesmanship is temporarily set aside, Congress will do more to aid small business. “We”™ve begun to make modest but tangible progress but we are a long way from full economic recovery,” Hinchey said.
